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A warning for divorced couples to finalise their property settlement

The recent decision of the Supreme Court of Queensland in Alagiah v Crouch highlights the risk that divorced couples face if they do not finalise, in a timely manner, their property settlement or at least commence Court proceedings relating to such a settlement.

In that case, Mr & Mrs Alagiah separated in 2006 and were then divorced in 2012. While some attempt was made to effect a property settlement between them, Mr Alagiah died in 2013 before property settlement proceedings were concluded or commenced. Mr Alagiah died intestate and as a consequence, Mrs Alagiah, as his former spouse, did not receive any of his Estate.

Pursuant to the Family Law Act, it was not possible for Mrs Alagiah to commence property settlement proceedings against her former husband’s Estate. The Family Law Act refers to proceedings between two living persons who are either parties to an existing marriage, or who were parties to a marriage which has been dissolved. While proceedings which have been commenced can continue against a deceased party, it is clear that property settlement proceedings cannot be commenced after the death of a party to the marriage or former marriage.

With that in mind, Mrs Alagiah commenced what is commonly referred to as a Family Provision Application in the Supreme Court of Queensland pursuant to the Succession Act 1981 (the Act), claiming provision from her former husband’s Estate for her proper maintenance and support.

One of the matters that the Supreme Court had to determine was whether Mrs Alagiah was entitled to so apply.

The Act sets out those persons who are eligible to apply for Family Provision. Such an eligible person includes a “spouse”, and the Act defines a spouse to include a dependant former husband, wife or registered partner of a deceased person being a person:

Who was divorced from the deceased; and

Had not remarried or entered into a registered relationship with another person before the deceased’s death; and

Was on the deceased’s death receiving or entitled to receive maintenance from the deceased.

There was no doubt that Mrs Alagiah satisfied the first and second of those criteria. The issue then became whether she satisfied the third criteria.

Interestingly, Mrs Alagiah argued that while she was not actually receiving maintenance from her former husband when he died, she was entitled to receive such maintenance from him because no provision had been made for her from his Estate as a result of him dying intestate. Her argument followed that she was therefore entitled to receive maintenance pursuant to the Act.

In arriving at her decision, Justice Ann Lyons of the Supreme Court considered the meaning of the words “entitled to receive maintenance”.

After considering earlier cases, Justice Lyons accepted that for Mrs Alagiah to be entitled to receive maintenance from her late former husband, she must have had at the date of his death, an actually crystallised right to payments of maintenance such as a right under an existing order of the Family Court or a binding agreement. Justice Lyons went on to find that whatever moral claims Mrs Alagiah had against her former husband, she was not a dependant former spouse as defined in the Act and was therefore not entitled to bring a Family Provision Application. Her Application was refused.

Somewhat curiously, if Mr and Mrs Alagiah had not been divorced and remained separated up until Mr Alagiah died, Mrs Alagiah would have been an eligible applicant for a Family Provision Application under the Act, as the fact that they were separated did not mean that she was no longer a “spouse”. However, the fact of their separation may have impacted on her prospects of being successful.

This issue would not have arisen at all if Mrs Alagiah had finalised her property settlement with Mr Alagiah before his death or at least had commenced Family Court proceedings which could then have continued after Mr Alagiah’s death.

Compare jurisdictions: Arbitration

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